At oral arguments, Supreme Court isn’t sold on Aereo

Court shows concern about the cloud, but not about the right to free TV.

It's impossible to know from today's oral arguments how the Supreme Court case about TV-over-Internet startup Aereo will turn out. But overall, it didn't look too good for Aereo.

Several justices made clear their concern about issuing a ruling that could hurt other cloud computing companies. Justice Sonia Sotomayor mentioned Dropbox specifically. "What does the Court do to avoid a definition or an acceptance of a definition that might make those people liable?" she asked Paul Clement, the lawyer representing ABC and other TV networks.

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Clement explained there's a "fundamental difference" between Aereo and a simple storage service, similar to the difference "between a car dealer and a valet parking service." If you show up to the car dealer without a car, you can get one. "If I show up to the valet parking service and I don't own a car, it's not going to end well for me."

Similarly, Clement explained how the justices could ban Aereo while upholding the 2008 Cablevision legal precedent, which legalized remote DVRs. The preference of Clement's broadcaster clients would be that Cablevision was overturned altogether, but a few justices asked questions suggesting they at least wanted to explore ways in which Cablevision might stand. With Cablevision, Clement explained, the US Court of Appeals for the 2nd Circuit had allowed a company to add DVR services to contents that it had paid for rights to. Aereo, by contrast, is unlicensed.

He described Aereo as a kind of wanton-lawbreaker version of a cable company running remote DVRs:

"Aereo is like if Cablevision, having won in the Second Circuit, decides: 'Whew, we won, so guess what? Going forward, we're going to dispense with all these licenses.'"

Overall, Aereo portrayed itself as simply being a more efficient version of an antenna and a DVR. The TV broadcasters, meanwhile, tried to portray Aereo as a company that's giving consumers content they wouldn't otherwise have.

Unfortunately for Aereo, the US Solicitor General weighed in on the side of the TV companies, suggesting an approach that could carve out a space to make cloud storage legal while shutting down Aereo.

"The basic distinction... is the distinction between the company... that provides content in the first instance and the company that provides consumers with access to content that they already have," said Deputy Solicitor General Malcolm Stewart, who argued after Clement.

At times during the argument it seemed like the idea that consumers had rights to any kind of free television had been forgotten altogether. Stewart talked about Cablevision having been decided appropriately because it dealt with "subscribers who were already entitled to view [programs] in real time."

"You are the only player so far... that doesn't pay"

When Aereo's lawyer, David Frederick, stepped up to the podium, a fair amount of time was spent discussing the technical aspects of the thousands of antennas.

"Was Judge Chin right when he said there was no technically sound reason to use these multiple antennas?" asked Justice Ruth Ginsburg. "That the only reason for that was to avoid the breach of the Copyright Act?"

Frederick spent a fair bit of time defending the practice of using individual antennas on technical grounds. "There are technical reasons why individual antennas provide the same utility at lower costs and functionality than one big antenna," responded Frederick.

Efficiency "is not a consideration under the Copyright Act," noted Frederick, who then went on to defend the efficiency of the system. That just led to further, and more intense, questioning by Chief Justice Roberts. It's mystifying why Frederick didn't simply say what Aereo CEO Chet Kanojia has said about the arrays of antennas: they're required for legal compliance.

Justice Antonin Scalia asked Frederick if Aereo could go ahead and broadcast widely, instead of merely to local markets. "It does not implicate the private performance and public performance distinction," said Frederick. "Even if you were to take distant signals and make them available in the home, it's still through a user-initiated, user-specific copy of distant programming."

That may be a legally correct argument, but it also seems like one that missed the justice's primary concern. What Scalia was really asking was, how many different lines of business does Aereo think it can get into and avoid paying copyright fees? Rebroadcasting non-local signals would require paying retransmission fees, and it seems like it would have been an opportune time to acknowledge that.

It was the same concern that Ginsburg got to a moment later.

"If every other transmitter does pay a royalty—maybe it's under compulsory license—and you are the only player so far that doesn't pay any royalties at any stage," she noted.

"The person who sells an antenna to me at the local Radio Shack doesn't pay copyright royalties either," said Frederick. Aereo's case was simply one of "how long the cord is" between the antenna, DVR, and user.

The justices didn't see it that simply, though.

"What the local antenna person doesn't do but you apparently could do... is with the same kind of device pick up every television signal in the world and send it... into a person's computer," said Justice Stephen Breyer. "And that sounds so much like what a CATV (Community Antenna TV) system does or what a satellite system does that it looks as if somehow you are escaping a constraint that's imposed upon them. That's what disturbs everyone.

"And then what disturbs me on the other side is I don't understand what the decision for you or against you when I write it is going to do to all kinds of other technologies."

The justices seemed to think of Aereo as being more like a cable system, or an Internet system that should require licensing, like Netflix or Hulu. "AT&T's system, Netflix, Hulu, all of those systems get their content and they don't push it down to you," said Sotomayor. "They do exactly what you do. They let you choose what you want to see."

Justice Elena Kagan noted that "from a user's perspective, it's exactly the same as if I'm watching cable."

It should be re-emphasized that it's hard to read into what a final decision will look like based on questions from Supreme Court justices. But the back-and-forth today did seem to suggest great skepticism towards the idea that Aereo should be allowed to exist wholly unlicensed by the content side of television. When cloud computing was discussed—Breyer brought it up repeatedly—it seemed to be with an eye towards how a solution wouldn't damage other companies, not Aereo.

To illustrate why oral arguments aren't always indicative of what the Supreme Court will decide: In 2012 it looked to everyone that they would strike down the Affordable Care Act after oral arguments were complete.

Clement explained there's a "fundamental difference" between Aereo and a simple storage service, similar to the difference "between a car dealer and a valet parking service." If you show up to the car dealer without a car, you can get one. "If I show up to the valet parking service and I don't own a car, it's not going to end well for me."

There's an even simpler fundamental difference. Aereo isn't a storage service. You essentially rent an antenna, the only "storage" is using their DVR services, which again, would have dangerous consequences for DVR services such as cable boxes, VCRs, or even cableCARDs.

It's not "car dealer vs valet parking", not when broadcasts are broadcasted over the air for free.

The very idea that the Justices are taking other forms of technology into consideration (ie, "the cloud") gives me hope. They've come a long way since MGM v. Grokster in 2005. It would be very easy for them to write an opinion- as Justice Breyer repeatedly implies- that hurts many other businesses. But that they acknowledge such a problem, I'd like to feel that they won't.

I'm still not a fan of the back and forth they were having with "transmit." Clement links it back to a performance, but then also says that the act of sending from one place to another counts as "transmission" based on the statute. Transmit should be linked to public performance in that transmission occurs when the audio/video/picture as defined in the statute is received by another human being at a place out of range of where the original copyrighted material gets "sent" from. Thus, for argument sake, the public vs private would be whether the content Aereo sends is received in a public or private setting. At least, that's how I'd interpret it.

They may not be fans of people skirting around the law, but the law needs fixing. Plus they even acknowledge that skirting around the law is what lawyers do (said to everyone's amusement)

Scalia is really the Justice to watch in these telecom related cases since he worked on the White House Office of Telecommunication Policy during the Nixon administration, and is thus unusually informed on the topic. Even more surprising, this knowledge has in the past meant that his rulings are pretty reasonable, which is a nice change of pace from his usual strict constructionism.

I wouldn't make such an overly broad claim. Copyright is an area where you historically could see liberals wanting stronger regulations and conservatives wanting more lax (i.e. reasonable) ones. Of course it always seems like kind of a crap shoot as to what actually ends up happening.

An out-of-touch Supreme Court questioning an evasive lawyer for Aereo. This will not end well for Aereo. There is some hope: the court rejected the Obama administration's arguments in favor of the Affordable Care Act while still upholding the law.

Would it be illegal for me to set up an antenna in NYC, record a TV broadcast, and send it over the Internet to my home in New Jersey? Why couldn't Aereo do this?

An out-of-touch Supreme Court questioning an evasive lawyer for Aereo. This will not end well for Aereo. There is some hope: the court rejected the Obama administration's arguments in favor of the Affordable Care Act while still upholding the law.

Would it be illegal for me to set up an antenna in NYC, record a TV broadcast, and send it over the Internet to my home in New Jersey? Why couldn't Aereo do this?

Aereo doesn't let you use their service unless you live in the particular city whose television you want to watch. A better question would be if that NYC antenna is sending the signal over the internet to your apartment in another part of NYC.

Scalia is really the Justice to watch in these telecom related cases since he worked on the White House Office of Telecommunication Policy during the Nixon administration, and is thus unusually informed on the topic. Even more surprising, this knowledge has in the past meant that his rulings are pretty reasonable, which is a nice change of pace from his usual strict constructionism.

He's a sharp cookie. It is generally when some bit of ideology, particularly involving [his view of] the Bible, gets involved that he turns things around backwards with his desired ruling driving the reasoning. *shrug*

The it's just a matter of "how long the cord is" argument isn't going to work well for them. If it's just an antenna then shouldn't they be sending the customer the full ATSC MPEG-2 stream? That's a 18.3Mbit/sec stream. Most internet providers have a hard enough time dealing with the 2-5Mbit stream from Netflix.

They are using the Cablevision decision to bolt together remote DVR with leased Antenna. The problem with this is you're trying to explain complicated technology to a bunch of senior citizens. If you have to explain it by analogy then you've already in the hole.

I really don't think a ruling in favor of Aereo would affect other license agreements with other companies. Aereo is not netflix or hulu. You don't get on demand programming. As I understand it, Aereo provides users access to their local over the air television via a DVR streaming content over the internet. They do not let you pick and choose things that have not aired locally, that you did not specify to record. Now I do see the justices questioning them about distribution of local content outside of the given local market... Which I do not believe Aereo does, nor should it do, that would be breaking copyright laws. The problem is I do not see them denying this outright. I don't know if it's one of their future plans, but if they won at the supreme court, trying to expand like that would wind up with them right back in court and this time they'd lose.

I do feel the supreme court will rule in favor of Aereo, but should definitely make it clear that it is only allowed to serve content to users from their own locality. I get crappy OTA coverage for some of the major stations where I live, while others are great. All Aereo is doing is ensuring optimal coverage of stations and redirecting that traffic over the internet. Just their lawyer seems to suck at answering questions.

I think it is good that the justices are taking other businesses and technologies into account, but what they do is essentially very different. They are letting the concerns of cloud companies interfere with a proper evaluation of Aereo's business model.... looks like i'm rambling, i'll stop now.

The it's just a matter of "how long the cord is" argument isn't going to work well for them. If it's just an antenna then shouldn't they be sending the customer the full ATSC MPEG-2 stream? That's a 18.3Mbit/sec stream. Most internet providers have a hard enough time dealing with the 2-5Mbit stream from Netflix.

They are using the Cablevision decision to bolt together remote DVR with leased Antenna. The problem with this is you're trying to explain complicated technology to a bunch of senior citizens. If you have to explain it by analogy then you've already in the hole.

And they're really not going to appreciate it if you try to bullshit them.

The antenna array exists because that's the secret sauce that makes this remotely legal.

Failure to just admit that, to just say "we do this to comply with the law, and because of this we are within the law" is not likely to help them. When you try to avoid making the only legal argument you have it seems like you're proper-fucked.

This seems to me to be an issue involving (a) format shifting and (b) retransmission. However it's wrapped under copyright law and public broadcasting because there's nothing that traditionally forbids format shifting now.

Who else here finds it a tad annoying that the broadcasters keep saying they want Cablevision overturned altogether? They could have, unless I'm mistaken, taken that case to the USSC before dragging Aereo up there.

And someone needs to smack Aereo's lawyer. All he needs to say is that Aereo's business model is the way it is because that's the only way it can comply with the law. Not waste time babbling on about technical aspects of the antennae.

An out-of-touch Supreme Court questioning an evasive lawyer for Aereo. This will not end well for Aereo. There is some hope: the court rejected the Obama administration's arguments in favor of the Affordable Care Act while still upholding the law.

Would it be illegal for me to set up an antenna in NYC, record a TV broadcast, and send it over the Internet to my home in New Jersey? Why couldn't Aereo do this?

Aereo doesn't let you use their service unless you live in the particular city whose television you want to watch. A better question would be if that NYC antenna is sending the signal over the internet to your apartment in another part of NYC.

This is why Clement's Dealership/Valet Parking analogy is borked. Because the "car companies" in this are giving away their cars so you can get one for free before having the Valet Service bring it out for you.

If Aereo's lawyer added a couple key phrases like "it's for the children's benefit" and "Allowing Aereo to continue to do business, will help fight terrorism" it would win the ruling and be done right now.

Seems like this could have been simplified with some pretty basic questions:

Justice: "Is it technologically possible for Aereo to retransmit almost every channel to customers? If so, would you do this?"

Lawyer: "It is possible yes, but my client doesn't believe it's legal to retransmit any channel that is not OTA in the customer's home region."

Am I missing something obvious here? Or just the supreme court showing showing their age again?

They could get away with retransmission completely by saying that it's the same as the individual having personal antenna + dvr + software that saves recorded data in the cloud + client that allows the individual to view recorded data. I might have stated that in a difficult way, but this is easily achievable if you have your antenna connected to, for example, xbmc that is set up to save recorded video to the cloud. This is really trivial to set up. If this is legal for me as an individual to set up my own antenna in NY and watch recorded shows in LA then it shouldn't matter for Aereo as well.

An out-of-touch Supreme Court questioning an evasive lawyer for Aereo. This will not end well for Aereo. There is some hope: the court rejected the Obama administration's arguments in favor of the Affordable Care Act while still upholding the law.

Well at least parts of the ACA. There was an important part that was struck down, creating the new "donut hole" that allows States to refuse to pass-thru Medicaid in an income band that leaves several million people making too little to get a subsidy on the insurance exchanges but too much to be covered by Medicaid in roughly twenty-some States.

So this could end up a mixed bag. Especially how this SCOTUS has gone out of their way to make very narrow rulings that don't decide much outside of their given cases.

I wouldn't be so sure. Aereo is a big company with potential to become a huge corporation. The right likes companies and they love huge corporations.

But in general I don't like Aereo's approach to the whole thing. Courts and the law generally do not care about specific engineering details of how something is done. Aereo needs to focus less on the "just a really long cable to your antenna" angle and more on the angle of providing content people are already entitled to without paying any royalty fees.

Their million tiny antenna thing is too cute by half, and trying to claim it's some how "efficient" to go to such ridiculous lengths is a bad idea. They are clearly jumping through hoops to avoid running afoul of copyright law - there is nothing efficient about it.

An out-of-touch Supreme Court questioning an evasive lawyer for Aereo. This will not end well for Aereo. There is some hope: the court rejected the Obama administration's arguments in favor of the Affordable Care Act while still upholding the law.

Would it be illegal for me to set up an antenna in NYC, record a TV broadcast, and send it over the Internet to my home in New Jersey? Why couldn't Aereo do this?

Aereo doesn't let you use their service unless you live in the particular city whose television you want to watch. A better question would be if that NYC antenna is sending the signal over the internet to your apartment in another part of NYC.

This is why Clement's Dealership/Valet Parking analogy is borked. Because the "car companies" in this are giving away their cars so you can get one for free before having the Valet Service bring it out for you.

Will it be enough? *shrug*

They are giving their cars away under certain conditions. The question is whether you've met them. If you didn't show up to "free car day" as required to get your car, you'd still be shit out of luck at the valet.

Personally I reject their "leased antenna" scheme, I don't think it's valid. But man, assuming it is (which I know most of you do), argue that. Just sit back and argue that, that what you are doing is technically legal because you have this particular hamster wheel in your system's block diagram. Trying to beat around the bush on that isn't doing them any favors.

Because as soon as you stop standing on the (arguably) firm ground of "one antenna per customer?" Yes, your service is illegal as a motherfucker.

I wouldn't be so sure. Aereo is a corporation. The right likes corporations.

But in general I don't like Aereo's approach to the whole thing. Courts and the law generally do not care about specific engineering details of how something is done. Aereo needs to focus less on the "just a really long cable to your antenna" angle and more on the angle of providing content people are already entitled to without paying any royalty fees.

Their million tiny antenna thing is too cute by half, and trying to claim it's some how "efficient" to go to such ridiculous lengths is a bad idea. They are clearly jumping through hoops to avoid running afoul of copyright law - there is nothing efficient about it.

I hope Aereo wins, but I don't like their chances.

The problem is that the law is already very, very explicit regarding the "already entitled to without paying royalty fees" thing.

Even if they don't molest the signal in any way, and even if they keep it within the broadcast area, cable TV companies (and any provider, really) are not authorized to rebroadcast that signal to customers without consent.

So asking the judges to say Aereo is good on those grounds, rather than the "too cute" scheme of millions of tiny antennae, is a nonstarter. Because then you're asking the judges to strike down a law outright, without any real constitutional reason to do so. I mean, they'll do that, but only if it's one of Scalia's pet causes...which this ain't.

An out-of-touch Supreme Court questioning an evasive lawyer for Aereo. This will not end well for Aereo. There is some hope: the court rejected the Obama administration's arguments in favor of the Affordable Care Act while still upholding the law.

Would it be illegal for me to set up an antenna in NYC, record a TV broadcast, and send it over the Internet to my home in New Jersey? Why couldn't Aereo do this?

Aereo doesn't let you use their service unless you live in the particular city whose television you want to watch. A better question would be if that NYC antenna is sending the signal over the internet to your apartment in another part of NYC.

This is why Clement's Dealership/Valet Parking analogy is borked. Because the "car companies" in this are giving away their cars so you can get one for free before having the Valet Service bring it out for you.

Will it be enough? *shrug*

They are giving their cars away under certain conditions. The question is whether you've met them. If you didn't show up to "free car day" as required to get your car, you'd still be shit out of luck at the valet.

Personally I reject their "leased antenna" scheme, I don't think it's valid. But man, assuming it is (which I know most of you do), argue that. Just sit back and argue that, that what you are doing is technically legal because you have this particular hamster wheel in your system's block diagram. Trying to beat around the bush on that isn't doing them any favors.

Because as soon as you stop standing on the (arguably) firm ground of "one antenna per customer?" Yes, your service is illegal as a motherfucker.

Free car day is every day. These signals are broadcast out on the airwaves for everyone. In keeping with the original analogy, all Aereo is doing is bringing you your car for a small fee.

And as for the last part of your post, all that illustrates is the stupidity of modern copyright law. Aereo shouldn't have to do business this way. They should be allowed to just have enough antennas for everyone to share at once rather than having to dedicate individual antennas to every individual customer. The end result is exactly the same, but the copyright definition of a "public performance" means that Aereo has to go to these stupid extremes to stay legal.

"What the local antenna person doesn't do but you apparently could do... is with the same kind of device pick up every television signal in the world and send it... into a person's computer," said Justice Stephen Breyer.

Now I'm curious, is it technically possible to build a giant antenna that really does pick up "every television signal in the world"? I realize that stations in different areas broadcast at the same frequencies, but is it possible to somehow work around that?

The part about "sending it into a person's computer" is pretty funny. I wonder how differently things would be going if Aereo sold a device that just plugged directly into your TV instead (even via coax cable if you want!). They could even give it a pair of non-functioning rabbit ears, just to drive home the point that it really IS just like an antenna.

It is pretty disturbing that the judges seem to have forgotten that these signals are already being broadcast to the public for free.

Quote:

"The basic distinction... is the distinction between the company... that provides content in the first instance and the company that provides consumers with access to content that they already have," said Deputy Solicitor General Malcolm Stewart, who argued after Clement.

Over the air broadcasts ARE "content that people already have" (free access to)!!

I wouldn't be so sure. Aereo is a corporation. The right likes corporations.

But in general I don't like Aereo's approach to the whole thing. Courts and the law generally do not care about specific engineering details of how something is done. Aereo needs to focus less on the "just a really long cable to your antenna" angle and more on the angle of providing content people are already entitled to without paying any royalty fees.

Their million tiny antenna thing is too cute by half, and trying to claim it's some how "efficient" to go to such ridiculous lengths is a bad idea. They are clearly jumping through hoops to avoid running afoul of copyright law - there is nothing efficient about it.

I hope Aereo wins, but I don't like their chances.

The problem is that the law is already very, very explicit regarding the "already entitled to without paying royalty fees" thing.

Even if they don't molest the signal in any way, and even if they keep it within the broadcast area, cable TV companies (and any provider, really) are not authorized to rebroadcast that signal to customers without consent.

So asking the judges to say Aereo is good on those grounds, rather than the "too cute" scheme of millions of tiny antennae, is a nonstarter. Because then you're asking the judges to strike down a law outright, without any real constitutional reason to do so. I mean, they'll do that, but only if it's one of Scalia's pet causes...which this ain't.

Thanks for the update. In that case Aereo is probably screwed.

Perhaps they can fight hard, loose, and get enough public outrage to have the law changed. It's certainly well accepted there are areas of copyright law that need to be amended. Perhaps this can get rolled into that discussion.

Free car day is every day. These signals are broadcast out on the airwaves for everyone. In keeping with the original analogy, all Aereo is doing is bringing you your car for a small fee.

Only there's this law in 1976 that said you can't pay somebody to pick you up a car at the free car lot, not if the car lot doesn't consent. You have to drag your happy ass down to the lot yourself. Daily.

Though really the car lots are happy to let others pick up for you...they just demand a small fee for it.

Quote:

And as for the last part of your post, all that illustrates is the stupidity of modern copyright law. Aereo shouldn't have to do business this way. They should be allowed to just have enough antennas for everyone to share at once rather than having to dedicate individual antennas to every individual customer. The end result is exactly the same, but the copyright definition of a "public performance" means that Aereo has to go to these stupid extremes to stay legal.

"What the local antenna person doesn't do but you apparently could do... is with the same kind of device pick up every television signal in the world and send it... into a person's computer," said Justice Stephen Breyer.

Now I'm curious, is it technically possible to build a giant antenna that really does pick up "every television signal in the world"?

I'm a little concerned about the line if questioning that states "couldn't you transmit to other markets?" Hopefully the justice is just trying to get their arms around where the limits are. The fact that Aereo could in theory transmit to other markets does not mean it's illegal to do what they are doing. Because isn't the answer "we don't transmit between markets, because that would be providing a very different service"?

The it's just a matter of "how long the cord is" argument isn't going to work well for them. If it's just an antenna then shouldn't they be sending the customer the full ATSC MPEG-2 stream? That's a 18.3Mbit/sec stream. Most internet providers have a hard enough time dealing with the 2-5Mbit stream from Netflix.

They did mention that compression was required.

You're right that there are a lot of technical things that have to happen to push the antenna signal down the Internet-sized pipes. And the broadcasters are making hay out of that, describing each step of the process in detail, making their argument that Aereo is much more than just an antenna.

An out-of-touch Supreme Court questioning an evasive lawyer for Aereo. This will not end well for Aereo. There is some hope: the court rejected the Obama administration's arguments in favor of the Affordable Care Act while still upholding the law.

Would it be illegal for me to set up an antenna in NYC, record a TV broadcast, and send it over the Internet to my home in New Jersey? Why couldn't Aereo do this?

Aereo doesn't let you use their service unless you live in the particular city whose television you want to watch. A better question would be if that NYC antenna is sending the signal over the internet to your apartment in another part of NYC.

This is why Clement's Dealership/Valet Parking analogy is borked. Because the "car companies" in this are giving away their cars so you can get one for free before having the Valet Service bring it out for you.

"The basic distinction... is the distinction between the company... that provides content in the first instance and the company that provides consumers with access to content that they already have," said Deputy Solicitor General Malcolm Stewart, who argued after Clement.

Over the air broadcasts ARE "content that people already have" (free access to)!!

I believe the argument is that you don't "have" the content until you hook up an antenna and tune into it.

So if Aereo's leased antenna isn't considered to be validly owned and controlled by you, no legitimate copy is ever created (because it's Aereo's antenna, even if it's one of a thousand, and not yours).

Otherwise, again, cable companies wouldn't have to pay the fees either. Even if they passed the signal live and unmolested.